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BrandIndex: Consumer opinion of United falls to decade low, but may recover

Brand perception tracker YouGov BrandIndex issued a report Thursday estimating that "United Airlines' (UAL) consumer perception levels fell to its lowest level in at least 10 years over the past three days, marking the steepest drop a domestic airline has taken since last August. However, it is too early to tell yet whether passengers will pull back from purchasing United Airlines tickets in the future, or given the industry's consolidation over the years, if they'll be able to... Putting this into perspective, airline mishaps occur periodically, causing a short minor drop in consumer perception, and then a bounce back, as the public gets past these incidents relatively quickly. Only two weeks ago, United wouldn't permit teen girls onto a plane because of the leggings they wore, dragging their perception down to its lowest level in a year, a more extreme reaction than most airline incidents. It took one week for United's consumer perception to head back up. Last August, Delta's (DAL) computer experienced a power failure, forcing the airline to ground thousands of flights worldwide. It took several weeks for Delta's consumer perception to fully recover from that crisis. But did it impact Delta's bottom line, given industry consolidation? On August 8, 37% of consumers would consider flying Delta the next time they had to purchase an airline ticket. Four days later, that number dropped to 27%. By September 1, they were up to 39%, even higher than where they were earlier." Reference Link

Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. Biogen (BIIB) was downgraded to Equal Weight from Overweight at Morgan Stanley and Market Perform from Outperform at Leerink. 2. United Continental (UAL) downgraded to In Line from Outperform at Evercore ISI. 3. Tyson Foods (TSN) downgraded to Hold from Buy at Argus with analyst John Staszak citing the SEC probe of Tyson and other poultry producers, potential decelerating earnings in coming quarters, and a recent bird flu outbreak in two states. 4. Williams-Sonoma (WSM) downgraded to Market Perform from Outperform at William Blair with analyst Daniel Hofkin citing the company's fourth quarter results. 5. Inovio (INO) downgraded to Neutral from Overweight at Piper Jaffray with analyst Charles Duncan saying a "lack of focus and advancement for any one program" poses execution risk to the broader platform, and to shareholders. The analyst lowered his price target for the shares to $9 from $13 following the company's Q4 results. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

03/20/17

STFL

03/20/17NO CHANGESTFL

Airlines loyalty programs undervalued, says Stifel

Stifel analyst Joseph DeNardi believes that investors are undervaluing airlines' loyalty programs and that airlines can remedy this situation by disclosing the financial metrics of their loyalty programs. He raised his price target on American (AAL) to $95 from $65, on Delta (DAL) to $75 from $65, on United Continental (UAL) to $125 from $95 and on Southwest (LUV) to $80 from $65. As noted earlier, he upgraded Alaska Air to Buy from Hold with a $145 price target.

Buckingham analyst Daniel McKenzie says that investors are worried that United Continental's capacity increases slated for this summer could trigger reactions by competitors and revenue misses. However, he says that the company's pre-tax earnings should rise by $2.5B in 2017 and 2018, versus the 17% decline in pre-tax earnings that the Street expects. He continues to believe that the company's EPS can reach $11 in one to three years, enabling its stock to rise to $125-$135. The analyst keeps a Buy rating on the shares.

DALDelta Air Lines

$44.00

-1.055 (-2.34%)

03/22/17

MSCO

03/22/17NO CHANGEMSCO

US Airlines industry downgraded to In-Line from Attractive at Morgan Stanley

Morgan Stanley analyst Rajeev Lalwani downgraded the US Airlines sector to In-Line from Attractive due to increasing domestic supply, estimated at +4-5% for 2017/2018, margin deterioration stagnated pricing. Lalwani is forecasting flat RASM in 2017/2018 versus consensus of +1% and maintained said higher supply/lower fuel costs maintain his consensus earnings and restrain valuations. The analyst prefers high quality names Delta Air Lines (DAL), Southwest (LUV), and Alaska Air (ALK) and downgraded American Airlines (AAL) to Equal Weight given leverage and mix.

04/04/17

EVER

04/04/17NO CHANGETarget $56EVEROutperform

Delta Air Lines weakness a buying opportunity, says Evercore ISI

Evercore ISI analyst Duane Pfenningwerth recommends looking beyond Delta's March monthly passenger unit revenue as he expects an acceleration into the June quarter given his increased confidence in domestic and leisure, and Delta's commitment to keep capacity in check. The analyst would use weakness as a buying opportunity and reiterates his Buy rating and a $56 price target.

04/13/17

SBSH

04/13/17NO CHANGETarget $63SBSHBuy

Citi says Delta cheapest way to play airlines earnings recovery

Citi analyst Kevin Crissey reiterates a Buy rating Delta Air Lines following the company's Q1 results and upped his price target for the shares to $63 from $62. The quarter contained no surprised while the Q2 outlook is supportive of a pricing recovery, Crissey tells investors in a research note. Delta shares offer the "cheapest, lowest risk" way to play the airlines earnings recovery in 2018, the analyst contends.